Italy cuts FiTs in an effort to “balance” renewables growth

Italian officials have revealed details of draft proposals for Italy’s latest renewable energy law, the fifth Conto Energia, which will see support reduced and regulation increased for the country’s renewable energy sector.

The Government said the measures, which will particularly hit the country’s burgeoning PV sector, will “balance” renewable energy growth in the country.

Amongst the proposals expected to come into force with the new law are cuts to Italy’s feed-in tariff (FiT), an annual installation cap, and the requirement for installations over 5MW to be put through a competitive bidding process.

The Government said this week that the new Conto Energia will come into effect for solar when the €6 billion ceiling for the PV FiT is reached, which is expected to happen between July and October. However, for other renewable technologies, the new law will take effect from the start of 2013.

Under the draft proposals, the FiT for both wind and solar is likely to see cuts. A 3kW rooftop PV installation could see its FiT reduced from 27.4 euro cents/kWh, to 23.7 euro cents/kWh, while a 200kW installation could see a reduction from 23.3 cents/kWh to 19.9 cents/kWh.

Furthermore, an annual cap of between 2 and 3GW will be imposed on PV installations, while systems over 12kW will have to register with the government and will only be eligible for the FiT when they fall within the limits of the cap.
The total installed capacity of all systems rated up to 12kW will be counted on an yearly basis and put towards the next year’s annual cap, reducing the cap year on year.

Italy has seen substantial growth in its renewables sector in the past two years, particularly in solar PV. More than 9GW of new PV capacity was connected last year. However, the country has suffered in the eurozone’s economic crisis, and the incoming government has been keen to impose austerity measures on all aspects of public spending, in an effort to curb Italy’s sovereign debt.

Ministers said that the new law aims to achieve both the “balanced growth of renewable energy” and the completion of the EU’s 2020 renewable energy targets – something that the government says Italy is on track to “exceed”. By 2020, Italy has to source 17% of its energy from renewable sources, up from 5.2% in 2005.

The Italian PV association, GIFI, described the measures as a “hard warning on sector prospects” for the Italian PV industry.

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